Court vacates class status in rail price-fixing case

Tuesday, August 13, 2013

The U.S. Court of Appeals for the District of Columbia Circuit has sent a class-action price-fixing lawsuit back to the lower court, vacating its class-action status due, in part, to a recent Supreme Court ruling.
A group of shippers brought the price-fixing case against BNSF, CSX, Norfolk Southern and Union Pacific — which, together, account for 90 percent of freight rail traffic in the United States — in 2007 to obtain class-action status to cover all shippers who paid these surcharges. The railroads had argued the cases needed to proceed separately as a lawsuit. The lower court sided with the shippers, and the railroads challenged the decision.
The appeals court found issues with the damages model used in the initial ruling and pointed out the lower court didn’t have the benefit of the Supreme Court case Comcast Corp. v. Behrend — which struck down a class action brought by Comcast subscribers and is relevant to the case at hand — in its ruling.
“Mindful that the district court neither considered the damages model’s flaw in its certification decision nor had the benefit of Behrend’s guidance, we will vacate class certification and remand the case to the district court to afford it an opportunity to consider these issues in the first instance,” the three-judge panel ruled.
While the status has to be looked at again by the lower court, the appeals court made clear that shippers can still proceed with individual lawsuits. - Jon Ross